New suspects in ARMA UAH 426 million embezzlement case

NABU and SAPO have established new participants in the corruption scheme for illegal trade in seized property transferred under the management of the Asset Recovery and Management Agency (ARMA).

On Oct. 4-5, 2022, two persons were notified of suspicion:

• an appraiser - Part 5 Art. 27, Part 5 Art. 191, Part 2 Art. 358, Part 4 Art. 358 of the Criminal Code of Ukraine;
• a lawyer - Part 2 Art. 28 - Part 2 Art. 364, Part 2 Art. 361 (as worded until April 2, 2022) of the Criminal Code of Ukraine.

The total number of participants in the scheme has increased to seven persons, including ARMA's former head and officials.

As established, the seized property was handed over to ARMA under the pretext of executing the decisions of the investigating judge. ARMA officials, in turn, issued conclusions that such assets are difficult to manage and store, or they quickly deteriorate and may lose their value. The property then was assessed by a company involved in the scheme at a significantly reduced value that was further applied during electronic auctions organized by SETAM. The participants in the scheme organized the bidding in such a way as to ensure the victory of a predetermined private company.

The suspected lawyer had illegal access to complete information in the Unified State Register of Court Decisions, including the one bearing the secrecy of the investigation, such as the search permits. Hence, he could inform other participants of the scheme in advance about possible risks and help conceal the crime. He also sought out appraisers who claimed to falsify reports and indicate an understated value of seized property. One of such appraisers was notified of suspicion in July. Another one has become a suspect this time.

NABU and SAPO have obtained evidence of at least four episodes of such illegal activity during 2019:

• the sale of three plots of land in the Odesa region, purchased previously for the construction of Auchan shopping centers - sold 18 times cheaper than the market value;
• the sale of 2.6 thousand tons of river sand of medium and fine grain in the Kyiv region - 6 times cheaper than the market value;
• the sale of more than 4.5 thousand tons of urea - almost 5 times cheaper than the market value;
• the sale of grain, groats, and oil crops - four times cheaper than the market value.

As a result, in these four episodes alone, more than UAH 426 million in damage was caused.

This July, five participants in the scheme were notified of suspicion.

According to Article 62 of the Constitution of Ukraine, a person is considered non-guilty in the commission of a crime and cannot be subject to criminal punishment until he or she is found guilty by court.